• Service: Tax, Global Mobility Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 6/5/2014

Korea - Effects of FATCA agreement  

June 5: Representatives of the governments of South Korea and the United States in early April 2014 reached an intergovernmental agreement (IGA) “in substance” under the FATCA regime.

The Korean tax authority originally had expected a FATCA agreement to be concluded by the end of May 2014, at the earliest, with the agreement to then enter into force beginning in July 2014, after release of the legislative notice.

With consent to a Model 1 “agreement in substance”—see the U.S. Treasury website—it is now expected that there will be the exchange of tax information, between Korea and the United States on an annual basis.

In addition, U.S. persons that have established in Korea a financial account of $50,000 or more (individuals) and $250,000 or more (corporations) will be subject to this provision. Conversely, the Korean tax authority will be able to obtain account information of Korean persons that have established accounts in the United States and earned a threshold amount of income annually.

Read a May 2014 report prepared by the KPMG member firm in Korea: Tax Brief (May 2014)

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